Business

U.S. investor Rogers issues stark warning over Japan's future

Kyodo

Renowned American investor Jim Rogers warned Thursday of a stark future for Japan if it does not take drastic measures to curb its massive debt and severe population decline.

“As far as I can see Japan doesn’t have a good future,” Rogers said at a news conference in Tokyo, warning that the compounding of problems could even lead to social unrest and capital flight from the world’s third-largest economy.

These problems could be compounded by disarray in the global currency market in the “foreseeable future,” caused by skyrocketing debt and little inclination to practice austerity by world governments, he said.

Rogers, chairman of Rogers Holdings and Beeland Interests Inc. who founded the Quantum Fund with George Soros in the 1970s, was in Japan to promote his most recent book “Warning to Japan” which came out in Japanese in July.

“You have decided de facto to have a declining standard of living because your debt goes up every day and your population goes down every day,” he told the Foreign Correspondents’ Club of Japan.

Referring to the government’s relaxation of immigration controls to welcome some 340,000 foreign workers in the next five years, intended to help combat the issues, he called the move “wonderful as a gesture.”

But Rogers said he believes it will be too little for a country of 125 million, preferring worldwide open borders.

As for the planned increase in Japan’s consumption tax by 2 percentage points to 10 percent on Oct. 1, Rogers said that rather than raising taxes, Prime Minister Shinzo Abe should focus on cutting spending “not with an axe but with a chainsaw.”

Crucially, Rogers said Japan needs to encourage people, especially in younger generations, to be creative, just as it did in the first few decades after World War II.

“That takes a radical mindset to change, but it’s not going to happen,” he said. “Maybe it will happen in the next crisis.”

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